Massachusetts Lawmakers Accept Governor's Amendments to Municipal Healthcare Bargaining Legislation: Action Paves Way for Immediate Implementation of the Law 07/11/2011

Ten days after passing legislation that restricted healthcare collective bargaining rights and provided municipalities with the power to shift a greater share of healthcare costs to public employees, members of the House and Senate today accepted a series of amendments to the measure, which help to lessen the impact on municipal workers. 

The amendments, offered by Governor Deval Patrick, provide workers with a greater share of cost savings achieved through plan design changes and better protections for retirees and individuals who highly utilize their benefits. 

However, Patrick’s amendments do not alter provisions of the legislation that provides cities and towns with the local option of implementing increases in co-payments and deductibles or transferring workers to the state’s Group Insurance Commission (GIC). If a city or town elects to take advantage of the law, the process will work as follows:

  • A municipality’s local governing body votes to exercise the local option afforded to them under the new law. 
  • The municipality notifies public employee unions of its intent to negotiate with all unions as Public Employee Coalition (PEC) and provides the PEC with proposed plan design changes aimed at reducing the overall costs of healthcare coverage. The municipality may also propose transferring workers to the GIC.  
  • Any proposed changes to existing municipal plan co-payments and deductibles are limited to benchmarks, which are tied to the most utilized plan within the GIC. Currently, the most utilized GIC plan is the Tufts Navigator plan.
  • The municipality and the PEC have 30 days from the notification to negotiate over the proposed changes.
  • If no agreement is reached the municipality’s plan design changes (including increases in co-payments and deductibles) are implemented immediately. 
  • However, the entire proposal is sent to the Municipal Health Insurance Review Panel, a new body established by the legislation. The panel has binding authority to require that up to 25% of the total costs savings achieved through the plan design changes be used to mitigate costs for individuals who are very sick and as such, are hit with a high number of co-payments and deductibles. 
  • If the proposal involves transferring coverage to the GIC, the municipality must prove and the panel must verify that more than 5% can be saved by transferring to the GIC.  The 5% must be above and beyond savings that could be achieved by simply implementing plan design changes to existing plans.
  • The panel’s decision must be issued within ten days and is binding on both parties.

 It is important to note that a municipality is NOT allowed to unilaterally change premium contribution rates.  These rates must continue to be negotiated through the collective bargaining process or through Section 19 coalition bargaining. 

The quality and type of plans also continues to be negotiated through collective bargaining or section 19 unless a municipality is allowed to transfer workers to the GIC.


The new law also requires the transfer to Medicare of all eligible retirees and requires the municipality to pay associated penalties. 

It also provides for a three-year moratorium on retiree premium contribution changes as of July 1, 2011. If a municipality had a proposal for an increase that was approved by the governing body of the municipality before July 1, 2011 and goes into effect July 1, 2011 it can take effect provided the municipality provides sufficient evidence to the Administration and Finance.

Click here to watch State House News Service Video Coverage a signing ceremony and press conference.